Candor eyes Mary March (April 08, 2003)

Candor Ventures (CND-V) has signed a letter of intent to acquire a half interest in the promising Mary March massive sulphide property from the Canadian exploration arm of Phelps Dodge (PD-N).

Situated about 20 km northeast of the past producing Buchans mine in central Newfoundland, Mary March covers about 24.5 sq. km along a 100-km-long trend stretching from Buchans to Pilley’s Island.

With about $745,000 spent so far, Phelps is about half way to the $1.5 million in expenditures required to earn a half interest in Mary March under a 1998 option deal with Noranda (NRD-T).

Under the latest deal, Candor can acquire the major’s half-interest by footing the remaining $755,000 bill. Candor must also issue Phelps 100,000 shares plus an equal number of two-year warrants. The warrants are exercisable at 25 apiece for the first year after closing, and at 50 apiece during the second year.

Candor must also pay Phelps $2 million in cash within six months of the beginning of commercial production. At the same time, a 1% net smelter return royalty payable to Phelps would kick in.

Candor notes that part of the property is currently the subject of a motion brought before the Newfoundland Mineral Rights Adjudication Board by a third party. The company expects a decision to follow quickly on the heels of final arguments, which are to be heard by May 27.

The transaction is subject to a favourable ruling, though Candor notes it could simply acquire the remainder of the property. The deal is also subject to normal regulatory approvals.

Between July 1999 and August 2000, Phelps sank 11 diamond drill holes to test a very strong copper-lead-zinc-barium soil anomaly on the property.

Hole 294-7 returned 9.2 metres running 10.3% zinc, 1.6% lead, 0.66% copper, 118.1 grams silver and 4.1 grams gold per tonne. Follow-up hole 294-11 encountered a 4.65-metre semi-massive-to-massive-sulphide interval, including 0.9 metre averaging 16.8% zinc, 5.4% lead, 0.18% copper, 660 grams silver and 12.2 grams gold.

So far, Phelps has identified 2 massive sulphide-bearing horizons. Elsewhere on the property, footwall-style mineralization has returned up to 3% zinc, 1.1%lead, 0.13% copper and 172.4 grams silver over 20.6 metres.

Massive sulphide mineralization on the property is hosted by intensely altered (sericite-chlorite-pyrite) felsic volcanics of the Buchans group.

Candor notes that the soil anomaly has been defined over a strike length of about 2 km with the favourable volcanic host rocks extend beyond the anomaly in either direction.

The property has not been explored since Phelps’ drilling wrapped up in August of 2000.

Candor intends to review all work completed at Mary March; detailed geophysical surveying will follow. A diamond-drilling program is planned to follow up on any targets outlined.